Pfizer-AstraZeneca: 'Deal will likely get done'Angus Walker
What next in the drama surrounding the proposed merger of pharmaceutical giants Pfizer and AstraZeneca? Although Pfizer offered close to USD 77 per share, AstraZeneca rejected the bid saying it undervalued the UK firm. But Morningstar’s Damien Conover, who is Director of Healthcare Research, believes the deal is likely to happen.
There are three reasons why he thinks Pfizer will try to push this through. Firstly the drugmaker will find it straightforward to cut costs at AstraZeneca. He also suggests that the US company can lower its tax rate if it acquires the UK firm. And thirdly he says a merger will help Pfizer’s attempts to get a foothold in oncology - a key area for the company in the future.
One concern for AstraZeneca shareholders in particular, is what happens to dividends post any merger? Conover believes Pfizer will keep them in place. He concludes that over the next few days people should expect to hear more discussions on share price as the companies try to agree a deal.